Committee publication · Correspondence · 13 July 2026
Letter from the EEA Accounting Officer at HM Treasury relating to the Exchange Equalisation Account – IMF poverty reduction and growth trust lending, 3 July 2026
Summary
The EEA Accounting Officer at HM Treasury responds to PAC concerns about Parliamentary control over SDR lending to the IMF's Poverty Reduction and Growth Trust. Treasury argues SDR activity operates within the Exchange Equalisation Account's separate statutory framework, does not displace Estimates spending, and has introduced advance Written Ministerial Statements to notify Parliament of material new SDR-related activity.
Key findings
- SDR lending and associated subsidies operate within the EEA's statutory framework (Exchange Equalisation Account Act 1979), funded via the National Loans Fund, not through departmental Estimates
- SDR-related activity does not constitute a call on the Consolidated Fund and does not displace spending requiring Parliamentary approval through the Estimates process
- Treasury has committed to notify Parliament in advance via Written Ministerial Statements of any new or material SDR-related activity, setting out value, duration, risks and fiscal impacts
- The commitment applies prospectively to novel arrangements or material changes, not retrospectively to existing activities
- Treasury rejects prescribing permissible SDR uses in primary legislation, arguing the existing statutory framework provides sufficient flexibility for effective reserve asset management
Tone
ProceduralTopics
public-financeparliamentary-oversightforeign-exchange-reservesinternational-finance
Key actors
Brian Bell, Sir Geoffrey Clifton-Brown, HM Treasury, Public Accounts Committee, International Monetary Fund, Exchange Equalisation Account
Notable line
“… activity of this kind does not substitute for, or displace, spending or financial transactions that would otherwise require Parliamentary approval through the Estimates process.”
Key Quotes
“SDRs are international reserve assets held within the EEA as part of the UK's foreign exchange reserves. As such, they are not part of departmental budgets and are not managed through departmental accounts or the Estimates framework.”
“The EEA cannot be used for wider spending purposes outside that framework without further legislative authority from Parliament.”
“… we have introduced a clear commitment that any new or novel SDR- related activity undertaken in connection with the UK's IMF-related functions and obligations, or other international obligations managed through the EEA, will be notified to Parliament in advance through Written Ministerial Statements, setting out the value, duration, risks and expected fiscal impacts.”
“This commitment will ensure that Parliament is informed of material developments as a matter of course, rather than at ministerial discretion, and it complements the enhanced disclosures now included in the EEA Annual Report and Accounts.”
Source · parliament.uk record ↗